Over the past six months, attention and worry have shifted from America’s enormous trade deficit to its surging property markets and real-estate bubble. At least two of the reasons for high – and rising – home prices in the United States are well understood. What remains highly uncertain, however, is whether an obviously overheating market can be cooled without sending America, and its main trading partners around the world, into an economic tailspin.
Over the past six months, attention and worry have shifted from America’s enormous trade deficit to its surging property markets and real-estate bubble. At least two of the reasons for high – and rising – home prices in the United States are well understood. What remains highly uncertain, however, is whether an obviously overheating market can be cooled without sending America, and its main trading partners around the world, into an economic tailspin.